Transcript OIL AND GAS AND GARFIELD COUNTY

The COGCC APD/LGD Process
and Recent Changes
Presented To –
Garfield County Energy Advisory Board
February 3, 2005
Presented By Doug Dennison, Oil & Gas Liaison
Goals of Presentation
• Summarize and explain some of the recent
changes to COGCC rules and policies
• Explain the COGCC’s process for
Application for Permit-to-Drill (APD)
– Opportunities for input from surface owners,
Local Governmental Designees (LGDs), and
others
– On-site inspection policy
– Obligations of operators to provide information to
LGDs and surface owners
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February 3, 2005
Background
• Colorado Oil & Gas Conservation Commission
(COGCC) has an established process for
involvement of LGDs and others in APD approval
• This process allows for input from LGDs and
surface owners during the review and approval
cycle for all APDs
• APD process was revised in April 2004 to open the
process to parties other than the surface owner or
LGD
• New onsite inspection policy will go into effect on
2/15/05
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February 3, 2005
COGCC Rule 303
• Rule 303.k.(1)
The Director may withhold approval of any Application
for Permit-to-Drill, Form 2, for any proposed well
when, based on information supplied in a written
complaint submitted by any party with standing
under rule 522.A.(1), other than a local governmental
designee,
NOTE: Rule 522.a.(1) defines a party of standing as –
… the mineral owner, surface owner or tenant of the lands
…, other state agencies, … the local government …, …
any other person who may be directly and adversely
affected or aggrieved as a result…
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February 3, 2005
COGCC Rule 303 (cont.)
• Rule 303.k.(1) (cont.)
… or by staff analysis, the Director has
reasonable cause to believe the proposed
well is in material violation of the
Commission’s rules, regulations, orders or
statutes, or otherwise presents an imminent
threat to public health, safety and welfare,
including the environment.
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February 3, 2005
COGCC Rule 303 (cont.)
• Rule 303.k.(1) (cont.)
…ANY SUCH WITHHOLDING OF APPROVAL SHALL BE
LIMITED TO THE MINIMUM PERIOD OF TIME
NECESSARY TO INVESTIGATE AND DISMISS THE
COMPLAINT, OR TO RESOLVE THE ALLEGED
VIOLATION. IF THE COMPLAINT IS DISMISSED OR
THE MATTER RESOLVED TO THE DISSATISFACTION
OF THE COMPLAINANT, SUCH PERSON MAY
CONSULT WITH THE LOCAL GOVERNMENTAL
DESIGNEE PURSUANT TO RULE 303.D.(4).
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February 3, 2005
COGCC Rule 303 (cont.)
• Rule 303.k.(2)
…The Director shall withhold approval of
any application for permit-to-drill, From
2, when a request for a hearing is made
by a local governmental designee in
accordance with rules 303.D.(4) AND
503.B.(6), unless the local government
has been disqualified from making
such request under Rule 501.b.
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February 3, 2005
COGCC Rule 303 (cont.)
• Rule 303.k.(3)
In the event the Director withholds
approval of any application for permitto-drill, Form 2, under this Rule 303.k,
an operator may ask the Commission
to issue an emergency order
rescinding the Director’s decision
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February 3, 2005
COGCC Rule 303 (cont.)
• Rule 303.k.(4)
Any hearing granted pursuant to this Rule
303.k. shall be expedited and the matter
shall be heard at the next scheduled
Commission hearing, and all parties shall
be deemed to have waived any notice
requirements to the contrary. The Director
shall use best efforts to notify the parties
of any such hearing.
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February 3, 2005
COGCC Rule 303 (cont.)
• Rule 303.l
SUSPENDING APPROVED PERMIT-TO-DRILL, FORM 2.
PRIOR TO THE SPUDDING OF THE WELL, THE
DIRECTOR SHALL SUSPEND AN APPROVED
PERMIT-TO-DRILL, FORM 2, IF THE DIRECTOR HAS
REASONABLE CAUSE TO BELIEVE THAT
INFORMATION SUBMITTED ON THE PERMIT-TODRILL, FORM 2 WAS MATERIALLY INCORRECT.
UNDER THE CIRCUMSTANCES DESCRIBED IN RULE
303.J.(1) OR (2), AN OPERATOR MAY ASK THE
COMMISSION TO ISSUE AN EMERGENCY ORDER
RESCINDING THE DIRECTOR’S DECISION.
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February 3, 2005
COGCC Rule 503
• Rule 503.b.(6)
• This rule is key to understanding the LGD process
For purposes of seeking a hearing on a Permit-to-Drill,
Form 2, under Rules 303.d. and 303.k.(2), the relevant
local government shall be the applicant, and the hearing
shall be conducted in similar fashion as is specified in
Rule 508.j., k. and l. with respect to a public issues
hearing. It shall be the burden of the local government
applicant to bring forward evidence sufficient for the
Commission to make the preliminary findings specified in
subsection j. of Rule 508. at the outset of such hearing.
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February 3, 2005
COGCC Onsite Inspection Policy
• Provides for an opportunity for the
surface owner (SO) to request an onsite
inspection with COGCC staff and LGD
prior to approval of an APD when:
– The SO did not execute a lease or is not
party to a surface use agreement (SUA) or
other agreement; and
– The SO contends that the impacts of the
well may not be addressed by COGCC
rules & regulations.
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February 3, 2005
COGCC Onsite Inspection Policy
(cont.)
• Purpose of Onsite Inspection
– Avoid potential unreasonable crop loss or
land damage;
– Address potential health, safety, welfare,
or adverse environmental impacts; or
– To ensure compliance with COGCC’s rules
relating to timing of operations and
location of facilities.
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February 3, 2005
COGCC Onsite Inspection Policy
(cont.)
• Purpose of Onsite Inspection (cont.)
– The onsite inspection shall not address
matters of –
•
•
•
•
Surface owner compensation
Property value diminution
Future use of property
Private party contractual issues
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February 3, 2005
COGCC Onsite Inspection Policy
(cont.)
• Conduct of Onsite Inspection
– Operator must provide SO with copy of onsite
inspection policy and request form at time of
initial notification (Rule 305)
– SO and Operator must first participate in goodfaith consultation (Rule 306)
– Within 10 business days of good-faith
consultation, SO must submit form requesting
onsite inspection (fax is preferred)
• SO must designate whether they want LGD to participate
in onsite inspection
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February 3, 2005
COGCC Onsite Inspection Policy
(cont.)
• Conduct of Onsite Inspection (cont.)
– COGCC staff will arrange time for onsite
inspection
– After completion of onsite inspection,
COGCC may apply site-specific drilling
permit conditions to address issues
identified
• Conditions must be consistent with COGCC
rules
• Operator may request a hearing if they object
to the conditions applied
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February 3, 2005
COGCC Onsite Inspection Policy
(cont.)
• Examples of conditions that may be
applied to an APD –
– Visual or aesthetic impacts
– Surface impacts
– Noise impacts
– Dust impacts
– Ground water impacts
– Safety impacts
– Wildlife impacts
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February 3, 2005
SURFACE OWNER/LGD
INVOLVEMENT IN APD PROCESS
• SO, LGDs, and other parties with standing have
opportunity to file written complaints to COGCC
prior to APD approval
• SO may request onsite inspection within 10
business days of good-faith consultation
• LGD has initial 10-day comment period which
can be extended to 20 days upon written
request to COGCC
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February 3, 2005
SURFACE OWNER/LGD
INVOLVEMENT IN APD PROCESS
(cont.)
• If complaints are not resolved to
complainants satisfaction, they may
pursue further action with their LGD
• LGD may request hearing on an APD
provided they have adequate basis per
Rule 508.j
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February 3, 2005
OPERATOR’S OBLIGATIONS
DURING APD PROCESS
• No heavy equipment operations can be started
until APD is approved
• Must provide copy of complete APD to LGD at or
before the time APD is filed with COGCC
• Must comply with all of the notification and
consultation requirements of Rules 305 and 306,
including providing SO with copy of onsite
inspection policy and request form
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February 3, 2005
OPERATOR’S OBLIGATIONS
DURING APD PROCESS (cont.)
• Rule 305.b
– Notice of drilling provided to SO and LGD at least 30
days prior to heavy equipment operations
– On irrigated crop lands between 3/1 and 10/31, must
contact SO14 days prior to construction to coordinate
with irrigation activities
– Must post notice of planned operations at or near site
at least 30 days prior to heavy equipment operations
– SO may waive notice requirement
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February 3, 2005
OPERATOR’S OBLIGATIONS
DURING APD PROCESS (cont.)
• Rule 306.a
– Operator must consult in good faith with surface
owner on locating roads, production facilities and well
sites
– Operator must provide an opportunity to engage in
similar consultation with LGD, if LGD has requested
such consultation
– Surface owner may waive consultation requirements
– SO may also request onsite inspection, if SO meets
criteria in onsite inspection policy and makes request
within 10 business days of good-faith consultation
Flowchart
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February 3, 2005
SUMMARY
• April 2004 rule changes have expanded the
universe of potential complainants on proposed
APDs
• April 2004 rule changes have clarified rules
applicable to the APD process
• January 2005 adoption of onsite inspection
policy provides another avenue for SOs to have
issues addressed prior to APD being approved
• The APD process allows for significant
involvement of SOs, LGDs, and others and
should be utilized to its fullest extent
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February 3, 2005
For More Information
• Garfield County Oil & Gas Liaison
– Doug Dennison
Phone 970-625-5691
Fax 970-625-0908
Cell 970-309-5441
[email protected]
• County Website
– www.garfield-county.com
– Click on “Oil & Gas” under “County Departments”
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February 3, 2005